Startups and corporate innovators often have a tenuous relationship. While enterprise leaders fear the disruptive threat of innovative startups, the nimble nature of a startup offers massive opportunity for forward-thinking innovators. Sometimes the most impactful way to solve a problem facing an enterprise business is to find an external agency or startup partner already solving that problem on a smaller scale.

It is sometimes overlooked that a primary responsibility of corporate innovators is to discover and partner with emerging startups, and also to make recommendations on investment and acquisition. finding startups that meet corporate criteria – whether that be in size, scope, scale, or staff – that can help meet corporate innovation objectives is not always easy. That’s where the help of corporate venturing firms like Venadar come in.

We recently spoke with Mark Kaiser, Venadar’s founder & CEO, about how corporations have changed their M&A priorities; where startups sit within the corporate innovation spectrum, and to solicit advice for intrapreneurs struggling to secure buy-in on a startup engagement strategy.

What prompted you to start a corporate venturing firm in 2005?

Prior to Venadar, I served in four other executive positions, including several times in the CEO role, so I became painfully aware of the constant pressure to drive growth. In the early 2000s, I became curious as to why, outside of a few IT partnerships, my organization didn’t seek or maintain working relationships with any startups or entrepreneurs. The more I thought about it, the more of a good idea I thought it was to engage with startups. That’s when I decided to start Venadar – to help connect corporations with startups that could move business priorities forward faster than they were equipped to do.

In the 12 years since, what have been the biggest changes in how corporations determine where, when and why to invest in startups?

Until about five years ago, organizations put a lot of effort toward learning and understanding technology. There was genuine interest in disruptive tech, but unfortunately, IT, C-Suite and even business units had a bias towards startup innovation. In plain terms – they didn’t want to acknowledge that the startup might be creating something that the organization didn’t have the resources, skills or time to do.

Since about 2011 or 2012, Fortune 500s, in particular, began to view the acquisition of startups as a means to drive growth. As such, some of the biggest brands in the world extended their reach through M&A in ways once never imagined. For example, Tyson’s Foods acquired its way into having an entire division dedicated to proteins other than chicken. Hershey’s acquired jerky maker Krave with an explicit mandate to transform the $30 million brand into a $500 million brand.

The prioritization of growth via M&A is not all that’s changed. As we all know, the modern consumer and customer now demand products and services expeditiously. And if it’s not working, we demand a pivot. But typical corporate R&D is very slow, sometimes taking years from design thinking to implementation. Consumers don’t have patience for such slow innovation anymore. With this reality, corporations took notice of people flocking to startups for speed and convenience, so they knew it was time to act or risk losing market share and revenue, potentially for good.